Long-term Investment in Real Estate

• 28 December 2018
• Property Focus
• 4011 Views

“Risk-averse” investors prefer to invest in tangible assets like property. There are many ways people invest in real estate, such as flipping properties i.e. holdingthem for a short term and selling at a profit. Some investors prefer to put their investments in the stock market, which is still not common in Cambodia, but investing in stock market means there is significant price volatility. However, income is generally more predictable in real estate investment than income from stock market.

Investors are turning to real assets – of all the prime real estate assets in good locations anywhere else in the world, the overall trend seems to point at the appreciation such as the convenience, which is likely to push up the value and hence making it a more appealing option for investors.

Investment in real estate can be an excellent way to build wealth, and it has its pros and cons. Buying a property allows you to decide how much the rent you can charge, and the tenants you allow to occupy it. There is no investment that can earn you a very high return without risk. There is also risk throughout the cyclewhen the property may sit vacant for several months at a time. When this happens, it means you are earning a negative return while you still have to cover all the necessary bills. On the other hand, sometimes you could also run into some unexpected maintenance problems that may cause you extra expenses.

For some people, owning and managing rental properties may take up a lot of their time commitment. If they do not want to be involved in the day-to-day operations or finding tenants, they can prepare to pay part of the rent to a property management company to trust all the investments to these experts. Some property management companies can manage these properties more efficiently than individuals, or smaller property management companies or the developer.

Buy and hold is the easiest form of real estate investment. At the same time, make sure you can cover all the expenses that go along with the investment property you have purchased. When it comes to property investment, you cannot sell it too soon or only own one property. In the end, the truth is that only those who hold for the long term in real estate can make money. As an investor, you must understand how much risk you’re willing to accept. If you’re willing to dedicate more time and effort and evaluate each investment property and know how to negotiate a favourable deal, then buying property for investment can bring you a very lucrative return in the long run.

• Analysis